Business

Be wise to a retailer's tricks

These days of frugality have many of us second-guessing our expenses and passing over things we normally have bought in the past without thinking. That's not easy. We are called "consumers" for a reason -- we love to consume. Retailers now have to try extra hard to entice us, and for the most part they have been successful. But if you know their tricks, you can see the pitch coming and avoid handing over your money without thinking.

These pitches begin with simple strategies such as the sale. Practically every window of every store has a 20, 40, 60 percent off or more sign. What stores don't say is how much the item cost them to buy. If it cost $40 for the store to buy, they price it at $120 and then put it on sale for half price, they make $20. So it's always good to try to find out the wholesale cost of a product, like the dealer price of a new car.

But there are other more sophisticated ways salespeople can persuade us to buy more.

Humans make decisions primarily based on emotions. If we made them based on our finances, no one would be in debt. Therefore, retailers try to approach a sale from an emotional aspect.

I learned this firsthand during a recent service call by a cable repairman. He used multiple sales strategies to get me to upgrade my equipment.

He started planting his sales seeds by being extremely nice and conversational, even complimenting my home and cute kids. Emotionally, we like people who like us so he was gaining my respect. Watch out for salespeople who are extra friendly. While it's appreciated, don't let it persuade you to buy a product you don't need just because someone is nice.

Then he told me other people are using wireless modems and how popular they are now. That painted a picture in my mind that if everyone else has one then I should have one. We consumers love to "keep up with the Joneses." But I really didn't need one because I rarely use my laptop at home.

He also used the strategy of reciprocation. He wanted me to buy his modem by offering to give me his cell phone number to call if I had any questions instead of calling the cable company. He was giving me something in return for hoping I would give him the sale.

Finally, a big sales strategy is to buy now to save money. Buying it now would avoid paying for another service call and price hikes in the cost of the modem. He created a sense of scarcity in my mind that if I did not buy now I wouldn't be able to get the deal later. But if you think about it, technology is getting cheaper so it's unlikely the price will go up, and I can always buy one and plug it in myself. Most deals won't go away forever, especially in this economy.

When you are shopping, begin by placing your needs first and have a price range that fits your budget. Don't be afraid to walk away. This way you are in control, not a savvy salesperson.

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